IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : `E' N EW DELHI
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
AND
SHRI B.C. MEENA, ACCOUNTANT MEMBER
ITA No. 2496/Del/ 2012
Assessment Year 2008-2009
Dr. Mrs. Manjot Kalra Vs. ITO Ward-37(1)
D-37, Sujan Singh Park New Delhi
New Delhi-110003
(PAN ­AAEPK 9628 A)
(Appellant) (Respondent)
Appellant by : Shri Manu Monga, Advocate
Respondent by : Shri Sunil Sharma, Sr. D.R.
ORDER
PER DIVA SINGH, J.M:
1. This is an appeal filed by the assessee against the order dated 19.03.2012 of
CIT(A)-XXVIII, New Delhi pertaining to the 2008-09 assessment year on the
following grounds :-
"1. That the Ld. CIT(A) erroneously upheld the addition of Rs.2,64,244/-
made by the AO on account of assessee's expenditure from
undisclosed sources.
2.(b) That the total withdrawal/drawings of the assessee for household
expenses were Rs.3,37,314/- and not Rs.35,756/-. The explanation
supported by the material on record has been wrongly brushed aside
by the Ld. CIT(A) concurring with the erroneous view of the view of
the AO.
3. That the Ld. CIT(A) has further gone wrong in restricting the
deduction claimed by the assessee to Rs.1,00,000/-. The relief granted
on estimate is inadequate."
2. The relevant facts of the case are that the assessee in the year consideration
declared an income of Rs.10,26,638/- which was processed under Section 143(1)
of the Income Tax Act, 1961. Subsequently, the return was selected for scrutiny
2 ITA No.2496/Del./2012
A.Y.2008-2009
under CASS. As a result of this, notice under Section 143(2) was issued and served
upon the assessee. In response thereto, assessee was represented by Shri K.K.
Mohindra and Shri Sambhav Mehrotra, C.As. However, they failed to produce the
books of account, vouchers and other documentary evidences specifically sought
for from the assessee. The Assessing Officer in para 1 of his order takes note of the
various ordersheet entries which showed that it was claimed on behalf of assessee
that she has been in USA and could not come to India due to some problem
relating to her passport; and after reaching India, she was not in Delhi and her
auditors/CA was also in Punjab. Accordingly it was claimed that it was difficult to
furnish the details and documents by obtaining the same from her online. In view
of the same the Assessing Officer passed an order under Section 144 of the Act
making the additions of Rs.2,45,371/- and Rs.2,64,244/- as "undeclared
commission income" and "expenditure from undisclosed sources" respectively.
The specific reasoning of the A.O. is extracted from the order hereunder for ready
reference:-
"Vide order sheet entry dated 10.12.2010 the case was finally
adjourned for 13.12.2010 as requested by K.K. Mohindra, FCA. He was
specifically requested to produce books of account, details of expenses for
household and for personal expenses. He was also required to explain why
commission from M/s Amway India Enterprises (P) Ltd. shown in the TDS
certificate at Rs.3,00,971/- should not be adopted as commission income
from M/s Amway India Enterprises (P) Ltd. instead of Rs.55,600/- shown in
the computation of total income. Since the assessee could not explain and
failed to produce books of account and vouchers, the undersigned is left with
no other alternative but to complete the assessment on the basis of
documents already available on record. I am satisfied that this is fit case for
initiating penalty proceedings u/s 271(1)(b).
The assessee has declared commission income at Rs.55,600/- whereas
she received Rs.3,00,971/- from M/s Amway India Enterprises (P) Ltd. The
assessee could not explain the difference in the income declared and the
income received inspite of specific requirement. Hence, the commission
income from M/s. Amway India Enterprises (P) Ltd. is assessed at
3 ITA No.2496/Del./2012
A.Y.2008-2009
Rs.3,00971/-. Net addition Rs.2,45,371/. I am satisfied that this is fit case for
initiating penalty proceedings u/s 271(1)(c) on this point.
The assessee has declared drawing for house hold expenses at
Rs.3,37,314/- details of the drawings submitted by the assessee revealed that
cash withdrawal is only at Rs.35,756/-. The other withdrawals are shown as
"amount paid through Indusind Bank 388830". The AR of the assessee
could not explain the entries nor produced books of account or vouchers.
Hence, the assessee's drawing is estimated at Rs. 25,000/- per month.
Balance drawing/expenses in excess of cash withdrawal of Rs.35,756/- is
treated as the assessee's expenditure from undisclosed sources. I am
satisfied that this is fit case for initiating penalty proceedings u/s 271(1)(c)
on this point."
3. Aggrieved by this, the assessee went in appeal before the First Appellate
Authority assailing the action of the Assessing Officer. The Ld. CIT(A)
considering the same gave partial relief qua the addition made pertaining to the
expenses relatable to the undeclared commission income and upheld the addition
on account of expenditure from undisclosed sources.
4. Aggrieved by this, the assessee is in appeal before the Tribunal. The Ld.
A.R. Shri Manu Monga relying upon the comparative chart of commission and
household expenses and the chart showing details of household drawing along with
written submissions before the Ld. CIT(A) contended that the impugned order has
been passed without taken into consideration the relevant facts. The Ld. Sr. D.R.
placed reliance on the impugned order.
5. We have heard the rival submissions and perused the material available on
record. On a consideration thereof, we find that the issues have been decided by
the Ld. CIT(A) in very cursory manner. Considering the fact that the A.O. is
passed u/s 144 where evidently necessary evidences and full facts are not available
in the circumstances taking into consideration the undertaking given by the Ld.
A.R. that in the eventuality the issue is restored the assessee shall fully cooperate
and participate in the proceedings before the Assessing Officer. The Ld. Sr. D.R.
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A.Y.2008-2009
had no objection to the issue being restored to the A.O. his only concern was that
the assessee should participate in the proceedings.
5.1 In the light of the above, we deem it appropriate to restore the issue back to
the file of the Assessing Officer. The assessee is given liberty to file afresh
evidences in support of its claim as evidently it could not be done at the assessment
stage. Accordingly, the issues are restored back to the file of the A.O. with the
direction to consider the fresh evidence filed if any and pass a speaking order, in
accordance with law, after giving the assessee a reasonable opportunity of being
heard. Taking note of the submissions of the Ld. Sr. D.R. we hope that the assessee
shall not abuse the opportunity so provided as in the eventuality the assessee fails
to appear before the A.O. without any reasonable cause the A.O. is free to pass an
order on the basis of material available on record. The said order was pronounced
in the open court in the presence of the parties on the date of hearing itself.
6. In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 09.07.2014
(B.C. MEENA) (DIVA SINGH)
Accountant Member Judicial Member
Dated 09.07.2014
Aks*
Copy of the order forwarded to:-
1. Appellant
2. Respondent
3. CIT (Appeals) concerned
4. CIT concerned
5. D.R., ITAT,
ASSISTANT REGISTRAR